Present value concept Answer each of the following
questions.
a. How much money would you have to invest today to
accumulate $6,000 after 10 years if the rate
of return on your investment is 11%?
b. What is the present value of $6,000 that you will
receive after 10 years if the discount rate
is 11%?
c. What is the most you would spend today for an investment that
will pay $6,000 in 10 years if your
opportunity cost is 11%?
d. Compare, contrast, and discuss your findings in part a
through a-c.
- Present Value Concept Answer Each Of The Following Questions A How Much Money Would You Have To Invest Today To Accu 1 (181.38 KiB) Viewed 37 times
Present value concept Answer each of the following
questions. a. How much money would you have to invest today to accumulate $6,000 after 10 years if the rate of return on your investment is 11%? b. What is the present value of $6,000 that you will receive after 10 years if the discount rate is 11%? c. What is the most you would spend today for an investment that will pay $6,000 in 10 years if your opportunity cost is 11%? d. Compare, contrast, and discuss your findings in part a through c. a. A single investment made today, earning 11% annual interest, worth $6,000 at the end of 10 years is $ (Round to the nearest cent.) b. The present value of $6,000 to be received at the end of 10 years, if the discount rate is 11%, is $. (Round to the nearest cent.) c. The most you would spend today for an investment that will pay $6,000 in 10 years if your opportunity cost is 11% is $. (Round to the nearest cent.) d. Compare, contrast, and discuss your findings in part a through c. (Select all answers that apply.) A. The annual interest rate is also called the discount rate or the opportunity cost. B. In all three cases, you are solving for the present value, PV, which is $2,113.11. C. In all three cases, the answer is $2,113.11. In part a, it is the payment, PMT. In part b, it is the present value, PV. In part c, it is the future value, FV. D. In parts a and c, $6,000 is the future value, FV. In part b, $6,000 is the present value, PV. Therefore, parts a and c have the same answer, while part b has a different answer.